The First Circuit handed a major victory to online gambling businesses Wednesday, rejecting the Justice Department’s 2018 effort to criminalize most of the industry and cost states billions of dollars in lottery revenue, reports the Courthouse News Service. Online gambling surged in America a decade ago when the Justice Department announced that the 1961 law criminalizing the use of wire transmissions for gambling was limited to sports betting.
The department reversed course under the presidency of former casino magnate Donald Trump, saying that the 1961 law banned all online betting, not just sports betting. Although the department hasn’t prosecuted anyone under the new paradigm, and it said in April 2019 that its ruling might or might not apply to state lotteries, the 2018 announcement cast a huge cloud over the industry and largely brought it to a standstill. A federal judge ruled against the Justice Department in 2019, and the First Circuit upheld that verdict today after a June 2020 hearing. The court could have issued a narrow decision holding that the 1961 law didn’t apply to state lotteries, but instead it interpreted the law broadly to provide protection to private gambling companies as well.